0000025475false00000254752023-11-062023-11-060000025475us-gaap:CommonClassAMember2023-11-062023-11-060000025475us-gaap:CommonClassBMember2023-11-062023-11-06
2,535
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 6, 2023
CRAWFORD & COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
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1-10356 |
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58-0506554 |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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5335 Triangle Parkway, Peachtree Corners, Georgia |
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30092 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(404) 300-1000
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities Registered Pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Class A Common Stock — $1.00 Par Value |
CRD-A |
New York Stock Exchange, Inc. |
Class B Common Stock — $1.00 Par Value |
CRD-B |
New York Stock Exchange, Inc. |
Item 2.02. Results of Operations and Financial Condition
On November 6, 2023, Crawford & Company (the "Company") issued a press release containing information about the Company's financial results for the third quarter 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.
Item 7.01. Regulation FD Disclosure
The Company has made available on the Company's website at https://ir.crawco.com a presentation designed to enhance the information presented at its quarterly earnings conference call on Tuesday, November 7, 2023 at 8:30 a.m. Eastern Time. A copy of the presentation is attached hereto as Exhibit 99.2 and is incorporated herein by this reference.
Item 9.01. Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
The information contained in this current report on Form 8-K and in the accompanying exhibits shall not be incorporated by reference into any filing of the Company with the SEC, whether made before or after the date hereof, regardless of any general incorporation by reference language in such filing, unless expressly incorporated by specific reference to such filing. The information, including the exhibits hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
2
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CRAWFORD & COMPANY |
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(Registrant) |
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By: |
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/s/ W. BRUCE SWAIN |
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W. Bruce Swain |
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Executive Vice President - |
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Chief Financial Officer |
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Dated: November 6, 2023 |
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3
Exhibit 99.1
Crawford & Company®
5335 Triangle Parkway
Peachtree Corners, GA 30092
FOR IMMEDIATE RELEASE
CRAWFORD & COMPANY REPORTS 2023 THIRD QUARTER RESULTS
RECORD QUARTERLY REVENUE DRIVES EARNINGS AND MARGIN EXPANSION
ATLANTA, (November 6, 2023) -- Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the third quarter ended September 30, 2023.
Based in Atlanta, Crawford & Company (NYSE: CRD‐A and CRD‐B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self‐insured entities with an expansive network serving clients in more than 70 countries. The Company’s two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available on the Company's website.
GAAP Consolidated Results
Third Quarter 2023
•Revenues before reimbursements of $325.6 million, up 10% over $294.9 million for the 2022 third quarter
•Net income attributable to shareholders of $12.3 million, compared with a loss of $(15.1) million in the same period last year
•Diluted earnings per share of $0.25 for both CRD-A and CRD-B, compared with diluted loss per share of $(0.31) for both CRD-A and CRD-B in the prior year third quarter
Non-GAAP Consolidated Results
Third Quarter 2023
Non-GAAP consolidated results for 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets of $1.7 million, non-service related pension costs of $1.6 million, and a contingent earnout adjustment of $2.1 million. Non-GAAP consolidated results for 2022 exclude a similar adjustment for amortization of intangible assets of $1.5 million, non-service related pension credits of $(0.4) million, a contingent earnout adjustment of $0.7 million, and a goodwill impairment of $20.9 million.
•Foreign currency exchange rates increased revenues before reimbursements by $0.6 million or less than 1%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $325.0 million, increasing 10% over the 2022 third quarter
•Net income attributable to shareholders, on a non-GAAP basis, totaled $17.7 million in the 2023 third quarter, compared with $7.5 million in the same period last year
•Diluted earnings per share, on a non-GAAP basis, totaled $0.35 for CRD-A and $0.36 for CRD-B in the 2023 third quarter, compared with $0.15 for both CRD-A and CRD-B in the prior year third quarter
•Consolidated adjusted operating earnings, on a non-GAAP basis, were $29.9 million, or 9.2% of revenues before reimbursements in the 2023 third quarter, more than doubling the $13.7 million, or 4.6% of revenues, in the 2022 period
•Consolidated adjusted EBITDA, a non-GAAP measure, was $38.6 million, or 11.9% of revenues before reimbursements in the 2023 third quarter, increasing 81% over the $21.4 million, or 7.2% of revenues, in the 2022 period
Management Comments
“We continued our momentum of growth and profit expansion in the third quarter of 2023 delivering our twelfth consecutive quarter of growth. Revenues grew by 10% to a new quarterly record and profits more than doubled compared to last year. We have built a strong foundation focused on operational excellence at Crawford, and our technology plus people strategy is driving growth and margin improvement across the business,” commented Rohit Verma, Chief Executive Officer of Crawford & Company.
“North America Loss Adjusting revenue grew more than 18% for the third quarter, driven by increased utilization, the addition of new clients, experts, and new account nominations. Broadspire saw record quarterly revenue fueled by business development efforts that have expanded our revenue base and continued growth in Medical Management services as we add workers' compensation clients. Our International segment also showed improved revenues and margins as our transformation of the international business continues. Platforms Solutions had meaningful growth in Contractor Connection and Subrogation, however there was offsetting softness in the Networks group where benign weather and a reduction in high-volume, low severity claim activity impacted results for the quarter. Platforms’ operating margin remained solid at mid-double digits.
“Overall, this was a very strong quarter for Crawford with healthy cash generation and further strengthening of our balance sheet.” Mr. Verma concluded.
Segment Results for the Third Quarter
North America Loss Adjusting
North America Loss Adjusting revenues before reimbursements were $79.4 million in the third quarter of 2023, increasing 18.8% from $66.8 million in the third quarter of 2022. Absent foreign exchange rate decreases of $(0.7) million, revenues would have been $80.1 million for the 2023 third quarter.
The segment had operating earnings of $10.5 million in the 2023 third quarter, increasing from $3.8 million in the third quarter of 2022. The operating margin was 13.2% in the 2023 quarter and 5.6% in the 2022 quarter.
International Operations
International Operations revenues before reimbursements were $98.1 million in the third quarter of 2023, up 13.9% from $86.1 million in the same period of 2022. Absent foreign exchange rate increases of $1.3 million, revenues would have been $96.8 million for the 2023 third quarter.
Operating earnings were $2.2 million in the 2023 third quarter, compared with a $(3.9) million operating loss in the 2022 period. The segment’s operating margin for the 2023 quarter was 2.2% as compared with (4.6)% in the 2022 quarter.
Broadspire
Broadspire segment revenues before reimbursements were $88.3 million in the 2023 third quarter, increasing 12.7% from $78.4 million in the 2022 third quarter.
Broadspire recorded operating earnings of $13.5 million in the third quarter of 2023, representing an operating margin of 15.3%, increasing from $6.2 million, or 7.9% of revenues, in the 2022 third quarter.
Platform Solutions
Platform Solutions revenues before reimbursements were $59.8 million in the third quarter of 2023, down (6.0)% from $63.7 million in the same period of 2022.
Operating earnings were $8.5 million in the 2023 third quarter, decreasing from the $10.1 million in the 2022 period. The segment’s operating margin for the 2023 quarter was 14.2% as compared with 15.8% in the 2022 quarter.
Unallocated Corporate and Shared Costs and Credits, Net
Unallocated corporate costs were $4.8 million in the third quarter of 2023, compared with $2.4 million in the same period of 2022. The increase in the 2023 third quarter was primarily due to increased incentive compensation and an increase in unallocated payroll tax and benefits costs.
2
2022 Goodwill Impairment
The Company recognized a $36.8 million pre-tax non-cash goodwill impairment in the third quarter of 2022. This charge was partially offset by a $15.9 million reduction in income tax expense, for a net impact of $20.9 million, or $0.43 per share. There was no goodwill impairment in 2023.
Other Matters
The Company recognized pretax contingent earnout expenses totaling $2.1 million and $0.9 million in the 2023 third quarter and comparable 2022 period, respectively, related to the fair value adjustment of earnout liabilities arising from recent acquisitions. This adjustment, which is not a component of operating earnings, is based on favorable changes to projections of acquired entities over the respective earnout periods, which span multiple years.
The Company recognized non-service pension costs of $2.2 million in the 2023 third quarter compared with credits of $(0.5) million in the 2022 period. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants.
Balance Sheet and Cash Flow
The Company’s consolidated cash and cash equivalents position as of September 30, 2023, totaled $49.2 million, compared with $46.0 million at December 31, 2022. The Company’s total debt outstanding as of September 30, 2023, totaled $218.4 million, compared with $238.9 million at December 31, 2022.
The Company’s operations provided $68.1 million of cash during the first nine months of 2023, compared with $(16.2) million used in 2022. The increase in cash provided was primarily driven by improved earnings, changes in working capital, including a reduction in work in process, increases in accrued incentive compensation as compared to payouts for prior year performance, and an increase in income tax refunds received.
The Company made no contributions to its U.S. defined benefit pension plan and $1.8 million in contributions to its U.K. plans for the first nine months of 2023, compared with no contributions to the U.S. plan and $0.5 million to the U.K. plans in 2022.
During 2023, the Company didn't repurchase any shares of CRD-A, but repurchased 63,103 shares of CRD-B at an average share cost of $9.24. During the first nine months of 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares of CRD-B at an average per share cost of $7.41 and $7.32, respectively. The total cost of share repurchases during 2023 was $0.6 million through September 30, 2023.
Conference Call
As previously announced, Crawford & Company will host a conference call on November 7, 2023, at 8:30 a.m. Eastern Time to discuss its third quarter 2023 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 94766677. A presentation for tomorrow’s call can also be found on the investor relations portion of the Company’s website, https://ir.crawco.com. The call will be recorded and available for replay through December 7, 2023. You may dial 1-877-674-7070 and use passcode 766677# to listen to the replay.
Non-GAAP Presentation
In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under U.S. generally accepted accounting principles (“GAAP”), these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in our consolidated results of operations. In the foregoing discussion and analysis of segment results of operations, we do not include a gross up of segment expenses and revenues for these pass-through reimbursed expenses. The amounts of reimbursed expenses and related revenues offset each other in our results of operations with no impact to our net income or operating earnings. A reconciliation of revenues before reimbursements to consolidated revenues determined in accordance with GAAP is self-evident from the face of the accompanying unaudited condensed consolidated statements of operations.
3
Operating earnings is the primary financial performance measure used by our senior management and chief operating decision maker (“CODM”) to evaluate the financial performance of our Company and operating segments, and make resource allocation and certain compensation decisions. Unlike net income, segment operating earnings is not a standard performance measure found in GAAP. We believe this measure is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria used by our senior management and CODM. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs, but before net corporate interest expense, stock option expense, goodwill impairment, amortization of customer-relationship intangible assets, contingent earnout adjustments, non-service pension costs and credits, income taxes and net income or loss attributable to noncontrolling interests.
Adjusted EBITDA is not a term defined by GAAP and as a result our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. However, adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results. The Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of the Company with adjustments for depreciation and amortization, net corporate interest expense, goodwill impairment, contingent earnout adjustments, non-service pension costs and credits, income taxes and stock-based compensation expense.
Unallocated corporate and shared costs and credits include expenses and credits related to our Chief Executive Officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, certain unallocated professional fees and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.
Income taxes, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, contingent earnout adjustments, and non-service pension costs and credits are recurring components of our net income, but they are not considered part of our segment operating earnings because they are managed on a corporate-wide basis. Income taxes are calculated for the Company on a consolidated basis based on statutory rates in effect in the various jurisdictions in which we provide services and vary significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors, affecting the Company as a whole. Stock option expense represents the non-cash costs generally related to stock options and employee stock purchase plan expenses which are not allocated to our operating segments. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our recent acquisitions. Non-service pension costs and credits represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan was frozen in 2002 and the U.K. plans are closed to new participants. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings to better assess the results of each segment's operating activities on a consistent basis.
Goodwill impairments arise from time to time due to various factors, but are not allocated to our operating segments since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular basis.
4
A significant portion of our operations are international. These international operations subject us to foreign exchange fluctuations. The following table illustrates revenue as a percentage of total revenue for the major currencies of the geographic areas that Crawford does business:
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Three Months Ended |
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Nine Months Ended |
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(in thousands) |
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September 30,
2023 |
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September 30,
2022 |
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September 30,
2023 |
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September 30,
2022 |
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Geographic Area |
Currency |
USD equivalent |
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% of total |
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USD equivalent |
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% of total |
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USD equivalent |
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% of total |
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USD equivalent |
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% of total |
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U.S. |
USD |
$ |
203,340 |
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62.5 |
% |
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$ |
183,197 |
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62.1 |
% |
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$ |
601,354 |
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62.7 |
% |
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$ |
523,650 |
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60.4 |
% |
U.K. |
GBP |
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38,290 |
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11.8 |
% |
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25,352 |
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8.6 |
% |
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106,139 |
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11.0 |
% |
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92,837 |
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10.7 |
% |
Canada |
CAD |
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24,188 |
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7.4 |
% |
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25,661 |
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8.7 |
% |
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72,656 |
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7.6 |
% |
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74,597 |
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8.6 |
% |
Australia |
AUD |
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22,867 |
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7.0 |
% |
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27,434 |
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9.3 |
% |
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68,787 |
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7.2 |
% |
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69,794 |
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8.1 |
% |
Europe |
EUR |
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14,629 |
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4.5 |
% |
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13,063 |
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4.4 |
% |
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42,968 |
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4.5 |
% |
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41,973 |
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4.8 |
% |
Rest of World |
Various |
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22,280 |
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6.8 |
% |
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20,217 |
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6.9 |
% |
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67,347 |
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7.0 |
% |
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64,443 |
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7.4 |
% |
Total Revenues, before reimbursements |
$ |
325,594 |
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100.0 |
% |
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$ |
294,924 |
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100.0 |
% |
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$ |
959,251 |
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100.0 |
% |
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$ |
867,294 |
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100.0 |
% |
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Following is a reconciliation of consolidated operating earnings to net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis:
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Three Months Ended |
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Nine Months Ended |
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(in thousands) |
September 30, 2023 |
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September 30, 2022 |
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September 30, 2023 |
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September 30, 2022 |
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Operating earnings (loss): |
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North America Loss Adjusting |
$ |
10,468 |
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$ |
3,750 |
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$ |
22,433 |
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$ |
10,533 |
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International Operations |
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2,197 |
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(3,922 |
) |
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8,974 |
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(7,648 |
) |
Broadspire |
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13,532 |
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6,198 |
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29,607 |
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20,299 |
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Platform Solutions |
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8,523 |
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10,080 |
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26,595 |
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|
22,714 |
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Unallocated corporate and shared costs, net |
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(4,781 |
) |
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(2,438 |
) |
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(9,998 |
) |
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(7,378 |
) |
Consolidated operating earnings |
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29,939 |
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13,668 |
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77,611 |
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38,520 |
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(Deduct) add: |
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Net corporate interest expense |
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(4,556 |
) |
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(2,903 |
) |
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(13,264 |
) |
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(6,201 |
) |
Stock option expense |
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(145 |
) |
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(142 |
) |
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(440 |
) |
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(478 |
) |
Amortization of intangible assets |
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(1,986 |
) |
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(1,998 |
) |
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(5,864 |
) |
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(5,784 |
) |
Non-service pension costs and credits |
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(2,170 |
) |
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532 |
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(6,436 |
) |
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1,646 |
|
Goodwill impairment |
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— |
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(36,808 |
) |
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— |
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(36,808 |
) |
Contingent earnout adjustments |
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(2,127 |
) |
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(887 |
) |
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(3,100 |
) |
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(3,246 |
) |
Income tax (provision) benefit |
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(6,781 |
) |
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13,286 |
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|
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(17,258 |
) |
|
8,092 |
|
Net loss attributable to noncontrolling interests |
|
145 |
|
|
108 |
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|
|
178 |
|
|
41 |
|
Net income (loss) attributable to shareholders of Crawford & Company |
$ |
12,319 |
|
$ |
(15,144 |
) |
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$ |
31,427 |
|
$ |
(4,218 |
) |
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5
Following is a reconciliation of net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:
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Three Months Ended |
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Nine Months Ended |
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(in thousands) |
September 30,
2023 |
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September 30,
2022 |
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September 30,
2023 |
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September 30,
2022 |
|
Net income (loss) attributable to shareholders of Crawford & Company |
$ |
12,319 |
|
$ |
(15,144 |
) |
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$ |
31,427 |
|
$ |
(4,218 |
) |
Add (Deduct): |
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Depreciation and amortization |
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9,115 |
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8,924 |
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27,356 |
|
|
27,379 |
|
Stock-based compensation |
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1,574 |
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|
808 |
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|
|
4,183 |
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|
4,218 |
|
Net corporate interest expense |
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4,556 |
|
|
2,903 |
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|
|
13,264 |
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|
6,201 |
|
Non-service pension costs and credits |
|
2,170 |
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|
(532 |
) |
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|
6,436 |
|
|
(1,646 |
) |
Goodwill impairment |
|
— |
|
|
36,808 |
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|
|
— |
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|
36,808 |
|
Contingent earnout adjustments |
|
2,127 |
|
|
887 |
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|
|
3,100 |
|
|
3,246 |
|
Income tax provision (benefit) |
|
6,781 |
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|
(13,286 |
) |
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|
17,258 |
|
|
(8,092 |
) |
Non-GAAP adjusted EBITDA |
$ |
38,642 |
|
$ |
21,368 |
|
|
$ |
103,024 |
|
$ |
63,896 |
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|
Following is a reconciliation of operating cash flow to free cash flow for the nine months ended September 30, 2023 and 2022:
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|
Nine Months Ended |
|
(in thousands) |
September 30, 2023 |
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|
September 30, 2022 |
|
|
Change |
|
Net Cash Provided by (Used in) Operating Activities |
$ |
68,077 |
|
|
$ |
(16,195 |
) |
|
$ |
84,272 |
|
Less: |
|
|
|
|
|
|
|
|
Property & Equipment Purchases, net |
|
(3,360 |
) |
|
|
(4,983 |
) |
|
|
1,623 |
|
Capitalized Software (internal and external costs) |
|
(24,323 |
) |
|
|
(19,933 |
) |
|
|
(4,390 |
) |
Free Cash Flow |
$ |
40,394 |
|
|
$ |
(41,111 |
) |
|
$ |
81,505 |
|
|
|
|
|
|
|
|
|
|
6
Following are the reconciliations of GAAP Pretax Earnings (Loss), Net Income (Loss) and Earnings (Loss) Per Share to related non-GAAP Adjusted figures, which reflect each of 2023 and 2022 before amortization of intangible assets, goodwill impairments, non-service related pension costs (credits) and contingent earnout adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2023 |
|
(in thousands) |
Pretax earnings |
|
Net income
attributable to Crawford & Company |
|
Diluted earnings per
CRD-A
share |
|
Diluted earnings per
CRD-B
share(1) |
|
GAAP |
$ |
18,955 |
|
$ |
12,319 |
|
$ |
0.25 |
|
$ |
0.25 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
1,986 |
|
|
1,711 |
|
|
0.03 |
|
|
0.03 |
|
Non-service related pension costs |
|
2,170 |
|
|
1,612 |
|
|
0.03 |
|
|
0.03 |
|
Contingent earnout adjustments |
|
2,127 |
|
|
2,101 |
|
|
0.04 |
|
|
0.04 |
|
Non-GAAP Adjusted |
$ |
25,238 |
|
$ |
17,743 |
|
$ |
0.35 |
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2022 |
|
(in thousands) |
Pretax (loss) earnings |
|
Net (loss) income
attributable to Crawford & Company |
|
Diluted (loss) earnings per
CRD-A
share |
|
Diluted (loss) earnings per
CRD-B
share |
|
GAAP |
$ |
(28,538 |
) |
$ |
(15,144 |
) |
$ |
(0.31 |
) |
$ |
(0.31 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
1,998 |
|
|
1,499 |
|
|
0.03 |
|
|
0.03 |
|
Goodwill impairment |
|
36,808 |
|
|
20,908 |
|
|
0.43 |
|
|
0.43 |
|
Non-service related pension credits |
|
(532 |
) |
|
(412 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
Contingent earnout adjustments |
|
887 |
|
|
657 |
|
|
0.01 |
|
|
0.01 |
|
Non-GAAP Adjusted |
$ |
10,623 |
|
$ |
7,508 |
|
$ |
0.15 |
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2023 |
|
(in thousands) |
Pretax earnings |
|
Net income
attributable to Crawford & Company |
|
Diluted earnings per
CRD-A
share |
|
Diluted earnings per
CRD-B
share |
|
GAAP |
$ |
48,507 |
|
$ |
31,427 |
|
$ |
0.63 |
|
$ |
0.64 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
5,864 |
|
|
5,039 |
|
|
0.10 |
|
|
0.10 |
|
Non-service related pension costs |
|
6,436 |
|
|
4,782 |
|
|
0.10 |
|
|
0.10 |
|
Contingent earnout adjustments |
|
3,100 |
|
|
2,503 |
|
|
0.05 |
|
|
0.05 |
|
Non-GAAP Adjusted |
$ |
63,907 |
|
$ |
43,751 |
|
$ |
0.88 |
|
$ |
0.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2022 |
|
(in thousands) |
Pretax (loss) earnings |
|
Net (loss) income
attributable to Crawford & Company |
|
Diluted (loss)
earnings per
CRD-A
share(1) |
|
Diluted (loss)
earnings per
CRD-B
share |
|
GAAP |
$ |
(12,351 |
) |
$ |
(4,218 |
) |
$ |
(0.08 |
) |
$ |
(0.09 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
5,784 |
|
|
4,338 |
|
|
0.09 |
|
|
0.09 |
|
Goodwill impairment |
|
36,808 |
|
|
20,908 |
|
|
0.42 |
|
|
0.42 |
|
Non-service related pension credits |
|
(1,646 |
) |
|
(1,277 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
Contingent earnout adjustments |
|
3,246 |
|
|
2,403 |
|
|
0.05 |
|
|
0.05 |
|
Non-GAAP Adjusted |
$ |
31,841 |
|
$ |
22,154 |
|
$ |
0.44 |
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
(1) Sum of reconciling items may differ from total due to rounding of individual components.
7
Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
(in thousands) |
September 30, 2023 |
|
September 30, 2022 |
|
September 30, 2023 |
|
September 30, 2022 |
|
Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
Class A Common Stock |
|
29,140 |
|
|
28,553 |
|
|
28,980 |
|
|
29,397 |
|
Class B Common Stock |
|
19,837 |
|
|
19,848 |
|
|
19,845 |
|
|
20,202 |
|
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
Class A Common Stock |
|
30,063 |
|
|
28,553 |
|
|
29,659 |
|
|
29,397 |
|
Class B Common Stock |
|
19,837 |
|
|
19,848 |
|
|
19,845 |
|
|
20,202 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP (1) |
|
|
|
|
|
|
|
|
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
Class A Common Stock |
|
30,063 |
|
|
28,930 |
|
|
29,659 |
|
|
29,754 |
|
Class B Common Stock |
|
19,837 |
|
|
19,848 |
|
|
19,845 |
|
|
20,202 |
|
|
|
|
|
|
|
|
|
|
(1) The Company had a net loss for GAAP reporting during the three and nine months ended September 30, 2022, resulting in no additional dilutive securities added to the basic weighted average shares in calculating diluted weighted average shares for GAAP reporting as their impact would be anti-dilutive. As the Company has Non-GAAP positive net income for the three and nine months ended September 30, 2022, these dilutive securities were added back to calculate Non-GAAP earnings per share.
Further information regarding the Company’s operating results for the three and nine months ended September 30, 2023, financial position as of September 30, 2023, and cash flows for the nine months ended September 30, 2023 is shown on the attached unaudited condensed consolidated financial statements.
About Crawford & Company
Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is a leading provider of claims management and outsourcing solutions to insurance companies and self-insured entities with an expansive network serving clients in more than 70 countries. The Company's two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available at www.crawco.com.
TAG: Crawford-Financial, Crawford-Investor-News-and-Events
FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.
|
This press release contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not historical facts may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company’s present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, including factors that could cause our actual financial condition, results or earnings to differ from those described in any forward-looking statements, please read Crawford & Company’s reports filed with the SEC and available at www.sec.gov and in the Investor Relations section of Crawford & Company’s website at www.crawco.com. |
8
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues Before Reimbursements |
|
$ |
325,594 |
|
|
$ |
294,924 |
|
|
|
10 |
% |
Reimbursements |
|
|
12,066 |
|
|
|
11,493 |
|
|
|
5 |
% |
Total Revenues |
|
|
337,660 |
|
|
|
306,417 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
Costs of Services Provided, Before Reimbursements |
|
|
229,969 |
|
|
|
221,233 |
|
|
|
4 |
% |
Reimbursements |
|
|
12,066 |
|
|
|
11,493 |
|
|
|
5 |
% |
Total Costs of Services |
|
|
242,035 |
|
|
|
232,726 |
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
Selling, General, and Administrative Expenses |
|
|
69,920 |
|
|
|
62,983 |
|
|
|
11 |
% |
Corporate Interest Expense, Net |
|
|
4,556 |
|
|
|
2,903 |
|
|
|
57 |
% |
Goodwill Impairment |
|
|
- |
|
|
|
36,808 |
|
|
|
(100 |
)% |
Total Costs and Expenses |
|
|
316,511 |
|
|
|
335,420 |
|
|
|
(6 |
)% |
|
|
|
|
|
|
|
|
|
|
Other (Loss) Income, Net |
|
|
(2,194 |
) |
|
|
465 |
|
|
|
(572 |
)% |
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes |
|
|
18,955 |
|
|
|
(28,538 |
) |
|
|
166 |
% |
Provision (Benefit) for Income Taxes |
|
|
6,781 |
|
|
|
(13,286 |
) |
|
|
151 |
% |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
|
12,174 |
|
|
|
(15,252 |
) |
|
|
180 |
% |
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Noncontrolling Interests |
|
|
145 |
|
|
|
108 |
|
|
|
34 |
% |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to Shareholders of Crawford & Company |
|
$ |
12,319 |
|
|
$ |
(15,144 |
) |
|
|
181 |
% |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share - Basic: |
|
|
|
|
|
|
|
|
|
Class A Common Stock |
|
$ |
0.25 |
|
|
$ |
(0.31 |
) |
|
|
181 |
% |
Class B Common Stock |
|
$ |
0.25 |
|
|
$ |
(0.31 |
) |
|
|
181 |
% |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share - Diluted: |
|
|
|
|
|
|
|
|
|
Class A Common Stock |
|
$ |
0.25 |
|
|
$ |
(0.31 |
) |
|
|
181 |
% |
Class B Common Stock |
|
$ |
0.25 |
|
|
$ |
(0.31 |
) |
|
|
181 |
% |
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per Share: |
|
|
|
|
|
|
|
|
|
Class A Common Stock |
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
|
17 |
% |
Class B Common Stock |
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
|
17 |
% |
9
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
2023 |
|
|
2022 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Revenues Before Reimbursements |
|
$ |
959,251 |
|
|
$ |
867,294 |
|
|
|
11 |
% |
Reimbursements |
|
|
36,743 |
|
|
|
30,564 |
|
|
|
20 |
% |
Total Revenues |
|
|
995,994 |
|
|
|
897,858 |
|
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
Costs of Services Provided, Before Reimbursements |
|
|
691,078 |
|
|
|
644,948 |
|
|
|
7 |
% |
Reimbursements |
|
|
36,743 |
|
|
|
30,564 |
|
|
|
20 |
% |
Total Costs of Services |
|
|
727,821 |
|
|
|
675,512 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
Selling, General, and Administrative Expenses |
|
|
199,871 |
|
|
|
193,222 |
|
|
|
3 |
% |
Corporate Interest Expense, Net |
|
|
13,264 |
|
|
|
6,201 |
|
|
|
114 |
% |
Goodwill Impairment |
|
|
- |
|
|
|
36,808 |
|
|
|
(100 |
)% |
Total Costs and Expenses |
|
|
940,956 |
|
|
|
911,743 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
Other (Loss) Income, Net |
|
|
(6,531 |
) |
|
|
1,534 |
|
|
|
(526 |
)% |
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes |
|
|
48,507 |
|
|
|
(12,351 |
) |
|
|
493 |
% |
Provision (Benefit) for Income Taxes |
|
|
17,258 |
|
|
|
(8,092 |
) |
|
|
313 |
% |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
|
31,249 |
|
|
|
(4,259 |
) |
|
|
834 |
% |
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable to Noncontrolling Interests |
|
|
178 |
|
|
|
41 |
|
|
|
334 |
% |
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to Shareholders of Crawford & Company |
|
$ |
31,427 |
|
|
$ |
(4,218 |
) |
|
|
845 |
% |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share - Basic: |
|
|
|
|
|
|
|
|
|
Class A Common Stock |
|
$ |
0.64 |
|
|
$ |
(0.08 |
) |
|
|
900 |
% |
Class B Common Stock |
|
$ |
0.64 |
|
|
$ |
(0.09 |
) |
|
|
811 |
% |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share - Diluted: |
|
|
|
|
|
|
|
|
|
Class A Common Stock |
|
$ |
0.63 |
|
|
$ |
(0.08 |
) |
|
|
888 |
% |
Class B Common Stock |
|
$ |
0.64 |
|
|
$ |
(0.09 |
) |
|
|
811 |
% |
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per Share: |
|
|
|
|
|
|
|
|
|
Class A Common Stock |
|
$ |
0.19 |
|
|
$ |
0.18 |
|
|
|
6 |
% |
Class B Common Stock |
|
$ |
0.19 |
|
|
$ |
0.18 |
|
|
|
6 |
% |
10
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2023 and December 31, 2022
Unaudited
(In Thousands, Except Par Values)
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
49,208 |
|
|
$ |
46,007 |
|
Accounts Receivable, Net |
|
|
151,142 |
|
|
|
141,106 |
|
Unbilled Revenues, at Estimated Billable Amounts |
|
|
131,251 |
|
|
|
126,274 |
|
Income Taxes Receivable |
|
|
4,245 |
|
|
|
9,098 |
|
Prepaid Expenses and Other Current Assets |
|
|
44,145 |
|
|
|
28,782 |
|
Total Current Assets |
|
|
379,991 |
|
|
|
351,267 |
|
|
|
|
|
|
|
|
Net Property and Equipment |
|
|
24,322 |
|
|
|
27,809 |
|
|
|
|
|
|
|
|
Other Assets: |
|
|
|
|
|
|
Operating Lease Right-of-Use Asset, Net |
|
|
91,364 |
|
|
|
93,334 |
|
Goodwill |
|
|
76,637 |
|
|
|
76,622 |
|
Intangible Assets Arising from Business Acquisitions, Net |
|
|
84,960 |
|
|
|
88,039 |
|
Capitalized Software Costs, Net |
|
|
93,370 |
|
|
|
82,975 |
|
Deferred Income Tax Assets |
|
|
18,142 |
|
|
|
19,573 |
|
Other Noncurrent Assets |
|
|
58,405 |
|
|
|
51,888 |
|
Total Other Assets |
|
|
422,878 |
|
|
|
412,431 |
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
827,191 |
|
|
$ |
791,507 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ INVESTMENT |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
Short-Term Borrowings |
|
$ |
16,955 |
|
|
$ |
27,048 |
|
Accounts Payable |
|
|
44,473 |
|
|
|
50,847 |
|
Accrued Compensation and Related Costs |
|
|
81,579 |
|
|
|
79,285 |
|
Self-Insured Risks |
|
|
22,545 |
|
|
|
12,614 |
|
Income Taxes Payable |
|
|
632 |
|
|
|
1,208 |
|
Operating Lease Liability |
|
|
24,766 |
|
|
|
22,910 |
|
Other Accrued Liabilities |
|
|
65,219 |
|
|
|
56,293 |
|
Deferred Revenues |
|
|
34,512 |
|
|
|
29,282 |
|
Total Current Liabilities |
|
|
290,681 |
|
|
|
279,487 |
|
|
|
|
|
|
|
|
Noncurrent Liabilities: |
|
|
|
|
|
|
Long-Term Debt and Finance Leases, Less Current Installments |
|
|
201,487 |
|
|
|
211,810 |
|
Operating Lease Liability |
|
|
80,411 |
|
|
|
84,628 |
|
Deferred Revenues |
|
|
25,535 |
|
|
|
24,737 |
|
Accrued Pension Liabilities |
|
|
24,969 |
|
|
|
25,914 |
|
Other Noncurrent Liabilities |
|
|
41,138 |
|
|
|
41,553 |
|
Total Noncurrent Liabilities |
|
|
373,540 |
|
|
|
388,642 |
|
|
|
|
|
|
|
|
Shareholders’ Investment: |
|
|
|
|
|
|
Class A Common Stock, $1.00 Par Value |
|
|
29,148 |
|
|
|
28,764 |
|
Class B Common Stock, $1.00 Par Value |
|
|
19,785 |
|
|
|
19,848 |
|
Additional Paid-in Capital |
|
|
83,548 |
|
|
|
78,158 |
|
Retained Earnings |
|
|
234,718 |
|
|
|
213,094 |
|
Accumulated Other Comprehensive Loss |
|
|
(202,577 |
) |
|
|
(215,321 |
) |
Shareholders’ Investment Attributable to Shareholders of Crawford & Company |
|
|
164,622 |
|
|
|
124,543 |
|
Noncontrolling Interests |
|
|
(1,652 |
) |
|
|
(1,165 |
) |
Total Shareholders’ Investment |
|
|
162,970 |
|
|
|
123,378 |
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders’ Investment |
|
$ |
827,191 |
|
|
$ |
791,507 |
|
11
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES
Unaudited
(In Thousands, Except Percentages)
Three Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Loss Adjusting |
|
% |
|
International Operations |
|
% |
|
Broadspire |
|
% |
|
Platform Solutions |
|
% |
|
|
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before Reimbursements |
|
$ |
79,390 |
|
$ |
66,822 |
|
18.8% |
|
$ |
98,066 |
|
$ |
86,066 |
|
13.9% |
|
$ |
88,299 |
|
$ |
78,381 |
|
12.7% |
|
$ |
59,839 |
|
$ |
63,655 |
|
(6.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
|
53,635 |
|
|
48,331 |
|
11.0% |
|
|
66,426 |
|
|
61,666 |
|
7.7% |
|
|
54,310 |
|
|
49,863 |
|
8.9% |
|
|
39,638 |
|
|
42,106 |
|
(5.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
67.6 |
% |
|
72.3 |
% |
|
|
|
67.7 |
% |
|
71.6 |
% |
|
|
|
61.5 |
% |
|
63.6 |
% |
|
|
|
66.2 |
% |
|
66.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
|
15,287 |
|
|
14,741 |
|
3.7% |
|
|
29,443 |
|
|
28,322 |
|
4.0% |
|
|
20,457 |
|
|
22,320 |
|
(8.3)% |
|
|
11,678 |
|
|
11,469 |
|
1.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
19.3 |
% |
|
22.1 |
% |
|
|
|
30.0 |
% |
|
32.9 |
% |
|
|
|
23.2 |
% |
|
28.5 |
% |
|
|
|
19.5 |
% |
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
68,922 |
|
|
63,072 |
|
9.3% |
|
|
95,869 |
|
|
89,988 |
|
6.5% |
|
|
74,767 |
|
|
72,183 |
|
3.6% |
|
|
51,316 |
|
|
53,575 |
|
(4.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss) (1) |
|
$ |
10,468 |
|
$ |
3,750 |
|
179.1% |
|
$ |
2,197 |
|
$ |
(3,922 |
) |
nm |
|
$ |
13,532 |
|
$ |
6,198 |
|
118.3% |
|
$ |
8,523 |
|
$ |
10,080 |
|
(15.4)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
13.2 |
% |
|
5.6 |
% |
|
|
|
2.2 |
% |
|
(4.6 |
)% |
|
|
|
15.3 |
% |
|
7.9 |
% |
|
|
|
14.2 |
% |
|
15.8 |
% |
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Loss Adjusting |
% |
International Operations |
% |
|
Broadspire |
% |
|
Platforms Solutions |
% |
|
|
2023 |
2022 |
Change |
|
2023 |
2022 |
Change |
|
2023 |
2022 |
Change |
|
2023 |
2022 |
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before Reimbursements |
|
$232,344 |
$197,035 |
17.9% |
|
$285,241 |
$269,048 |
6.0% |
|
$253,369 |
$234,949 |
7.8% |
|
$188,297 |
$166,262 |
13.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
162,418 |
142,937 |
13.6% |
|
190,178 |
190,273 |
(0.0)% |
|
161,451 |
147,611 |
9.4% |
|
124,238 |
110,424 |
12.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
69.9% |
72.5% |
|
|
66.7% |
70.7% |
|
|
63.7% |
62.8% |
|
|
66.0% |
66.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
47,493 |
43,565 |
9.0% |
|
86,089 |
86,423 |
(0.4)% |
|
62,311 |
67,039 |
(7.1)% |
|
37,464 |
33,124 |
13.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
20.4% |
22.1% |
|
|
30.2% |
32.1% |
|
|
24.6% |
28.5% |
|
|
19.9% |
19.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
209,911 |
186,502 |
12.6% |
|
276,267 |
276,696 |
(0.2)% |
|
223,762 |
214,650 |
4.2% |
|
161,702 |
143,548 |
12.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss)(1) |
|
$22,433 |
$10,533 |
113.0% |
|
$8,974 |
$(7,648) |
nm |
|
$29,607 |
$20,299 |
45.9% |
|
$26,595 |
$22,714 |
17.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
9.7% |
5.3% |
|
|
3.1% |
(2.8)% |
|
|
11.7% |
8.6% |
|
|
14.1% |
13.7% |
|
(1) A non-GAAP financial measurement which represents net income attributable to the applicable reporting segment excluding income taxes, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, non-service pension costs and credits, contingent earnout adjustments, goodwill impairments, and certain unallocated corporate and shared costs and credits. See pages 3 and 4 for additional information about segment operating earnings.
12
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year to Date Period Ended September 30, 2023 and September 30, 2022
Unaudited
(In Thousands)
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
|
Cash Flows From Operating Activities: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
31,249 |
|
|
$ |
(4,259 |
) |
Reconciliation of net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
27,355 |
|
|
|
27,379 |
|
Goodwill impairment |
|
|
— |
|
|
|
36,808 |
|
Stock-based compensation |
|
|
4,183 |
|
|
|
4,218 |
|
Loss (gain) on disposal of property and equipment |
|
|
96 |
|
|
|
(1,562 |
) |
Contingent earnout adjustments |
|
|
3,100 |
|
|
|
3,246 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable, net |
|
|
(6,309 |
) |
|
|
(9,329 |
) |
Unbilled revenues, net |
|
|
419 |
|
|
|
(23,537 |
) |
Accrued or prepaid income taxes |
|
|
5,306 |
|
|
|
(23,162 |
) |
Accounts payable and accrued liabilities |
|
|
(1,437 |
) |
|
|
(20,612 |
) |
Deferred revenues |
|
|
4,869 |
|
|
|
(191 |
) |
Accrued retirement costs |
|
|
4,818 |
|
|
|
(1,684 |
) |
Prepaid expenses and other operating activities |
|
|
(5,572 |
) |
|
|
(3,510 |
) |
Net cash provided by (used in) operating activities |
|
|
68,077 |
|
|
|
(16,195 |
) |
|
|
|
|
|
|
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
Acquisitions of property and equipment |
|
|
(3,360 |
) |
|
|
(4,983 |
) |
Capitalization of computer software costs |
|
|
(24,323 |
) |
|
|
(19,933 |
) |
Payments for business acquisitions, net of cash acquired |
|
|
— |
|
|
|
(26,309 |
) |
Cash proceeds from sale of property and equipment |
|
|
— |
|
|
|
3,032 |
|
Net cash used in investing activities |
|
|
(27,683 |
) |
|
|
(48,193 |
) |
|
|
|
|
|
|
|
Cash Flows From Financing Activities: |
|
|
|
|
|
|
Cash dividends paid |
|
|
(9,284 |
) |
|
|
(8,938 |
) |
Repurchases of common stock |
|
|
(582 |
) |
|
|
(26,749 |
) |
Increases in short-term and revolving credit facility borrowings |
|
|
20,958 |
|
|
|
99,952 |
|
Payments on short-term and revolving credit facility borrowings |
|
|
(43,719 |
) |
|
|
(15,129 |
) |
Payments of contingent consideration on acquisitions |
|
|
(6,760 |
) |
|
|
(2,118 |
) |
Other financing activities |
|
|
1,317 |
|
|
|
(87 |
) |
Net cash (used in) provided by financing activities |
|
|
(38,070 |
) |
|
|
46,931 |
|
|
|
|
|
|
|
|
Effects of exchange rate changes on cash and cash equivalents |
|
|
1,313 |
|
|
|
(2,351 |
) |
Increase (Decrease) in cash, cash equivalents, and restricted cash(1) |
|
|
3,637 |
|
|
|
(19,808 |
) |
Cash, cash equivalents, and restricted cash at beginning of year(1) |
|
|
46,645 |
|
|
|
53,689 |
|
Cash, cash equivalents, and restricted cash at end of period(1) |
|
$ |
50,282 |
|
|
$ |
33,881 |
|
(1) The 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $1,074 at September 30, 2023, and the 2022 amounts include beginning restricted cash of $461 at December 31, 2021, and ending restricted cash of $782 at September 30, 2022, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets.
13
Third Quarter 2023 Financial Results CRD-A & CRD-B (NYSE) ® Crawford & Company
Forward-Looking Statements & Additional Information Q3 2023 FINANCIAL RESULTS Forward-Looking Statements This presentation contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not statements of historical fact may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company's present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. Results for any interim period presented herein are not necessarily indicative of results to be expected for the full year or for any other future period. For further information regarding Crawford & Company, and the risks and uncertainties involved in forward-looking statements, please read Crawford & Company's reports filed with the Securities and Exchange Commission and available at www.sec.gov or in the Investor Relations portion of Crawford & Company's website at https://ir.crawco.com. Crawford's business is dependent, to a significant extent, on case volumes. The Company cannot predict the future trend of case volumes for a number of reasons, including the fact that the frequency and severity of weather-related claims and the occurrence of natural and man-made disasters, which are a significant source of cases and revenue for the Company, are generally not subject to accurate forecasting. Revenues Before Reimbursements ("Revenues") Revenues Before Reimbursements are referred to as "Revenues" in both consolidated and segment charts, bullets and tables throughout this presentation. Segment and Consolidated Operating Earnings Under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") Topic 280, "Segment Reporting," the Company has defined segment operating earnings as the primary measure used by the Company to evaluate the results of each of its four operating segments. Segment operating earnings represent segment earnings, including the direct and indirect costs of certain administrative functions required to operate our business, but excludes unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, contingent earnout adjustments, non-service pension costs and credits, goodwill impairments, income taxes and net income or loss attributable to noncontrolling interests. Earnings Per Share The Company's two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information available on the Company’s website. The two-class method is an earnings allocation method under which earnings per share ("EPS") is calculated for each class of common stock considering both dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. As a result, the Company may report different EPS for each class of stock due to the two-class method of computing EPS as required by ASC Topic 260 - "Earnings Per Share". Segment Gross Profit Segment gross profit is defined as revenues, less direct costs, which exclude indirect centralized administrative support costs allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each segment based on usage. Non-GAAP Financial Information For additional information about certain non-GAAP financial information presented herein, see the Appendix following this presentation.
STRATEGIC UPDATE Rohit Verma, Chief Executive Officer 3 Q3 2023 FINANCIAL RESULTS
Countries 70 Employees 10,000 50,000 Field Resources $18B+ Claims Managed Annually Global Reach; Trusted Partner Q3 2023 FINANCIAL RESULTS
Climate change continues to drive global demand in weather-related claims Gaining market share within fragmented U.S. independent loss adjusting market Industry-leading Insurtech capabilities creating significant growth in Platform Solutions segment Growing and strengthening strategic partnerships across business segments Increased presence in rapidly growing P&C insurance markets with strong outsourced claims processing tailwinds Multiple Growth Drivers Benefitting Crawford Q3 2023 FINANCIAL RESULTS
Q3 Highlights Achieved record quarterly revenue Net income increased by 181% YoY Operating earnings up 119% YoY Margin expansion and improved profitability in three of our segments Added $24 million in new and enhanced business $84 million increase in operating cash flow Returning capital to shareholders; resumed share repurchase program and raised quarterly dividend to $0.07 per share for the third quarter NPS increase of +3 points from last quarter to 49 YoY Revenue Growth 10% YoY Non-GAAP Adjusted Operating Earnings Growth* 119% $295M $326M $14M $30M 6 * See Appendix for non-GAAP explanation and reconciliation 3Q ‘22 3Q ‘23 3Q ‘22 3Q ‘23 Q3 2023 FINANCIAL RESULTS
Margin Improvement Strategy Driving Results Increased YoY Operating Margins Across Three of Four Business Segments International Operations 2.2% +680bps Broadspire 15.3% +742bps North America Loss Adjusting 13.2% +758bps -160bps 14.2% Platform Solutions Align pricing with the value we deliver Aggressively address low productivity pockets Optimize cost structure to current market dynamics Roll out new systems and improved processes for efficiency gains Q3 2023 FINANCIAL RESULTS
Our Capital Allocation Strategy Committed to Industry Leading Financial Strength and Employing a Disciplined Approach to Capital Allocation Investing in long-term growth through Cap Ex and M&A Debt Repayment Reduce leverage (1.40x EBITDA in Q3 2023) Raised quarterly dividend to $0.07 per share Repurchased 63K shares of CRD-B in Q3 under share repurchase program Returned over $131 million of capital to shareholders through share buybacks and dividends since 2019 Q3 2023 FINANCIAL RESULTS
Q3 2023 FINANCIAL RESULTS OPERATIONAL UPDATE Joseph Blanco, President
International Operations Comprised of All Reported Service Lines Outside of North America: UK Europe Australia Asia Latin America Legal Services 30% of YTD revenues North America Loss Adjusting Broadspire (US-only) Platform Solutions (US-only) Third Party Administration for: Workers' Compensation Auto and Liability Claims Medical Management Disability RMIS Accident and Health Service Lines Include: Contractor Connection Networks Catastrophe WeGoLook Subrogation (Praxis) Comprised of the Following North American Service Lines: US GTS US Field Ops Canada Loss Adjusting Canada TPA Canada Contractor Connection edjuster 24% of YTD revenues 27% of YTD revenues 19% of YTD revenues Operating Segments Q3 2023 FINANCIAL RESULTS
Q3 revenue growth of 19% YoY Expert adjuster additions continued through Q3 Approximately 60 adjusters added YTD New account nominations driving growing market share in USLA GTS and Field Ops driving improved utilization Operating margin expanded 758 bps YoY North America Loss Adjusting Q3 Revenues $79.4M Q3 Operating Earnings $10.5M Q3 2023 FINANCIAL RESULTS
Q3 revenue growth of 14% YoY and 12% when measured in constant currency $6.1 million operating earnings improvement YoY with continued growth in UK TPA business, large loss performance in Latin America, and efficiency improvement measures in Europe driving increased margins Actions to improve pricing and productivity drove favorable results Operating margin expanded 680 bps YoY Q3 Revenues $98.1M International Operations Q3 Operating Earnings $2.2M Q3 2023 FINANCIAL RESULTS
$13.5M Q3 record revenues increasing 13% YoY, expanded revenue base through business development Increased Medical Management revenue growth of over 16% YoY Benefitting from pricing improvements Advanced data analytics and predictive modeling driving market share increase Operating margin expanded 742 bps YoY Retained 94.3% of our Broadspire business year-to-date Broadspire Q3 Revenues $88.3M Q3 Operating Earnings Q3 2023 FINANCIAL RESULTS
Q3 revenue decreased by 6% YoY reflecting benign hurricane season Subrogation revenues grew by 24% YoY driven by increased productivity and new projects Contractor Connection revenues grew 9% YoY Some carriers relying more heavily on internal teams in the short term during current mild weather pattern Platform Solutions Q3 Revenues $59.8M Q3 Operating Earnings $8.5M Q3 2023 FINANCIAL RESULTS
FINANCIAL UPDATE Bruce Swain, Chief Financial Officer Q3 2023 FINANCIAL RESULTS
Q3 2023 Financial Summary (1) See Appendix for non-GAAP explanation and reconciliation Quarter Ended ($ in millions, except per share amounts) September 30, 2023 September 30, 2022 % Change Revenues $325.6 $294.9 10% Non-GAAP Revenues excluding foreign exchange fluctuations(1) $325.0 $294.9 10% Net Income (Loss) Attributable to Shareholders of Crawford & Company $12.3 $(15.1) 181% Diluted Earnings (Loss) per Share CRD-A $0.25 $(0.31) 181% CRD-B $0.25 $(0.31) 181% Non-GAAP Diluted Earnings per Share (1) CRD-A $0.35 $0.15 133% CRD-B $0.36 $0.15 140% Adjusted Operating Earnings (1) $29.9 $13.7 119% Adjusted Operating Margin (1) 9.2% 4.6% 460 bps Adjusted EBITDA (1) $38.6 $21.4 81% Adjusted EBITDA Margin (1) 11.9% 7.2% 470 bps Q3 2023 FINANCIAL RESULTS
North America Loss Adjusting Three months ended (in thousands, except percentages) September 30, 2023 September 30, 2022 Variance Revenues $79,390 $66,822 18.8% Direct expenses 59,653 54,428 9.6% Gross profit 19,737 12,394 59.2% Indirect expenses 9,269 8,644 7.2% Operating earnings $10,468 $3,750 179.1% Gross profit margin 24.9% 18.5% 6.4% Operating margin 13.2% 5.6% 7.6% Total cases received 78,434 72,112 8.8% Full time equivalent employees 2,029 2,064 (1.7)% Q3 2023 FINANCIAL RESULTS
International Operations Three months ended (in thousands, except percentages) September 30, 2023 September 30, 2022 Variance Revenues $98,066 $86,066 13.9% Direct expenses 83,592 76,677 9.0% Gross profit 14,474 9,389 54.2% Indirect expenses 12,277 13,311 (7.8)% Operating earnings (loss) $2,197 $(3,922) 156.0% Gross profit margin 14.8% 10.9% 3.9% Operating margin 2.2% (4.6)% 6.8% Total cases received 121,074 123,270 (1.8)% Full time equivalent employees 3,645 3,683 (1.0)% Q3 2023 FINANCIAL RESULTS
Broadspire Three months ended (in thousands, except percentages) September 30, 2023 September 30, 2022 Variance Revenues $88,299 $78,381 12.7% Direct expenses 62,799 60,494 3.8% Gross profit 25,500 17,887 42.6% Indirect expenses 11,968 11,689 2.4% Operating earnings $13,532 $6,198 118.3% Gross profit margin 28.9% 22.8% 6.1% Operating margin 15.3% 7.9% 7.4% Total cases received 143,173 141,658 1.1% Full time equivalent employees 2,599 2,535 2.5% Q3 2023 FINANCIAL RESULTS
Platform Solutions Three months ended (in thousands, except percentages) September 30, 2023 September 30, 2022 Variance Revenues $59,839 $63,655 (6.0)% Direct expenses 45,761 48,054 (4.8)% Gross profit 14,078 15,601 (9.8)% Indirect expenses 5,555 5,521 0.6% Operating earnings $8,523 $10,080 (15.4)% Gross profit margin 23.5% 24.5% (1.0)% Operating margin 14.2% 15.8% (1.6)% Total cases received 136,663 150,192 (9.0)% Full time equivalent employees 1,333 1,349 (1.2)% Q3 2023 FINANCIAL RESULTS
Additional Financial Matters Unallocated Corporate and Shared Costs and Credits Unallocated corporate costs of $4.8 million in Q3 ‘23 compared to costs of $2.4 million in the prior year Variance was primarily due to an increase in incentive compensation and unallocated payroll tax and benefit costs Non-service Pension Costs and Credits During Q3 ‘23 non-service pension costs were $2.2 million compared to a $(0.5M) credit in Q3 ‘22 These costs and credits are not a component of operating earnings and are added back for non-GAAP earnings and EPS Contingent Earnout Adjustment Recognized a pre-tax contingent earnout expense totaling $2.1 million in Q3 ‘23, compared to $0.9 million in the prior year based on changes to projections of certain acquired entities These costs are not a component of operating earnings and are added back for non-GAAP earnings and EPS Quarterly Dividend In Q3 ‘23 Crawford raised the quarterly dividend to $0.07 per share for CRD-A and CRD-B Share Repurchases Crawford repurchased 63,103 shares of CRD-B Approximately 1.7 million shares are eligible to be repurchased under our 2021 Share Repurchase Authorization Q3 2023 FINANCIAL RESULTS
Balance Sheet Highlights (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) Sept 30, 2023 December 31, 2019 Dec 31, 2022 December 31, 2018 Change Change Cash and cash equivalents $ 49,208 $ 46,007 $ 3,201 Accounts receivable, net 151,142 141,106 10,036 Unbilled revenues, net 131,251 126,274 4,977 Total receivables 282,393 267,380 15,013 Goodwill 76,637 76,622 15 Intangible assets arising from business acquisitions, net 84,960 88,039 (3,079 ) Deferred revenues 60,047 54,019 6,028 Pension liabilities 24,969 25,914 (945 ) Short-term borrowings and current portion of finance leases 16,955 27,048 (10,093 ) Long-term debt, less current portion 201,487 211,810 (10,323 ) Total debt 218,442 238,858 (20,416 ) Total stockholders' equity attributable to Crawford & Company 164,622 124,543 40,079 Net debt (1) 169,234 192,851 (23,617 ) Q3 2023 FINANCIAL RESULTS
Net Debt and Pension Liability $169.2M Net debt at $169.2 million $171.7M Leverage Ratio of 1.40x EBITDA at end of Q3 2023 $25.0M Pension liability at $25.0 million $87.0M Funded Ratio of US pension plan is 91.1% at end of Q3 2023 Q3 2023 FINANCIAL RESULTS
Operating and Free Cash Flow (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) 2023 2019 2022 2018 Change Change Net Income Attributable to Shareholders of Crawford & Company $ 31,427 $ (4,218 ) $ 35,645 Depreciation and Other Non-Cash Operating Items 31,360 31,556 (196 ) Goodwill Impairment - 36,808 (36,808 ) Loss (Gain) on Disposals of Property and Equipment, net 96 (1,562) 1,658 Contingent Earnout Adjustments 3,100 3,246 (146 ) Billed Receivables Change (6,309 ) (9,329 ) 3,020 Unbilled Receivables Change 419 (23,537 ) 23,956 Change in Accrued Compensation, 401K, and Other Payroll (735 ) (18,710 ) 17,975 Change in Accrued and Prepaid Income Taxes 5,306 (23,162 ) 28,468 Other Working Capital Changes 5,208 (6,800 ) 12,008 U.K. Pension Contributions (1,795 ) (487 ) (1,308 ) Cash Flows from Operating Activities 68,077 (16,195 ) 84,272 Property & Equipment Purchases, net (3,360 ) (4,983 ) 1,623 Capitalized Software (internal and external costs) (24,323 ) (19,933 ) (4,390 ) Free Cash Flow(1) $ 40,394 $ (41,111 ) $ 81,505 Q3 2023 FINANCIAL RESULTS
Despite Less Weather-Related Activity in Q4, 2023 Expected To Be a Record Revenue Year Expected decrease in profit contribution Q3 2023 FINANCIAL RESULTS Q4 ‘22 saw hyperactive storm activity – Hurricane Ian and Winter Storm Elliott $40M - $50M in Q4 ‘22 weather-related revenue will likely not be repeated in Q4 ‘23 $10M - $15M in Q4 ‘22 weather-related profit contribution will likely not be repeated in Q4 ’23 Non-weather-related business demonstrating healthy growth Despite difficult Q4 ‘22 comparison, Company on track for record revenue for full year 2023 Q4 ‘22 saw major storm activity including Hurricane Ian, one of the largest insured losses on record1 1 – Prevention Web, September 2023
Financial strength and liquidity provide flexibility to pursue market opportunities Leveraging established relationships with carriers to create “sticky” revenue Positioned to capitalize on the changing landscape due to climate change and demographic shifts Leading the industry with next generation Insurtech capabilities Summary Q3 2023 FINANCIAL RESULTS
Appendix: Non-GAAP Financial Information 27 Q3 2023 FINANCIAL RESULTS
Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to other similarly-titled measurements employed by other companies. Reimbursements for Out-of-Pocket Expenses In the normal course of our business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in our consolidated results of operations. In this presentation, we do not believe it is informative to include in reported revenues the amounts of reimbursed expenses and related revenues, as they offset each other in our consolidated results of operations with no impact to our net income or operating earnings. As a result, unless noted in this presentation, revenue and expense amounts exclude reimbursements for out-of-pocket expenses. Net Debt Net debt is computed as the sum of long-term debt, capital leases and short-term borrowings less cash and cash equivalents. Management believes that net debt is useful because it provides investors with an estimate of what the Company's debt would be if all available cash was used to pay down the debt of the Company. The measure is not meant to imply that management plans to use all available cash to pay down debt. Free Cash Flow Management believes free cash flow is useful to investors as it presents the amount of cash the Company has generated that can be used for other purposes, including additional contributions to the Company's defined benefit pension plans, discretionary prepayments of outstanding borrowings under our credit agreement, and return of capital to shareholders, among other purposes. It does not represent the residual cash flow of the Company available for discretionary expenditures. Q3 2023 FINANCIAL RESULTS
Non-GAAP Financial Information (cont.) Segment and Consolidated Operating Earnings Operating earnings is the primary financial performance measure used by our senior management and chief operating decision maker to evaluate the financial performance of our Company and operating segments and make resource allocation and certain compensation decisions. Management believes operating earnings is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria our management and chief operating decision maker use. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs and credits, but before net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, contingent earnout adjustments, non-service pension costs and credits, goodwill impairments, income taxes and net income or loss attributable to noncontrolling interests. Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each segment based on usage. Adjusted EBITDA Adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results and the Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of the Company with recurring adjustments for depreciation and amortization, net corporate interest expense, contingent earnout adjustments, non-service pension costs and credits, goodwill impairments, income taxes and stock-based compensation expense. Adjusted EBITDA is not a term defined by GAAP and as a result our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. Adjusted Revenue, Operating Earnings, Pretax Earnings, Net Income, Diluted Earnings per Share and EBITDA Included in non-GAAP adjusted measurements as an add back or subtraction to GAAP measurements, are impacts of amortization of customer-relationship intangible assets, contingent earnout adjustments, and non-service pension costs and credits, which arise from non-core items not directly related to our normal business or operations, or our future performance. Management believes it is useful to exclude these charges when comparing net income and diluted earnings per share across periods, as these charges are not from ordinary operations. Q3 2023 FINANCIAL RESULTS
The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Total Revenue Before Reimbursements by Major Currency Three Months Ended (in thousands) September 30, 2023 September 30, 2022 Geographic Area Currency USD equivalent % of total USD equivalent % of total U.S. USD $ 203,340 62.5% $ 183,197 62.1% U.K. GBP 38,290 11.8% 25,352 8.6% Canada CAD 24,188 7.4% 25,661 8.7% Australia AUD 22,867 7.0% 27,434 9.3% Europe EUR 14,629 4.5% 13,063 4.4% Rest of World Various 22,280 6.8% 20,217 6.9% Total Revenues, before reimbursements $ 325,594 100.0% $ 294,924 100.0% Q3 2023 FINANCIAL RESULTS
Revenues and Costs of Services Provided Reconciliation of Non-GAAP Items Quarter Ended Quarter Ended Quarter Ended Quarter Ended Unaudited ($ in thousands) September 30, 2023 December 31, September 30, 2022 December 31, 2019 2018 Revenues Before Reimbursements Total Revenues $ 337,660 $ 306,417 Reimbursements (12,066 ) (11,493 ) Revenues Before Reimbursements 325,594 294,924 Costs of Services Provided, Before Reimbursements Total Costs of Services 242,035 232,726 Reimbursements (12,066 ) (11,493 ) Costs of Services Provided, Before Reimbursements $ 229,969 $ 221,233 Q3 2023 FINANCIAL RESULTS
Operating Earnings Reconciliation of Non-GAAP Items (cont.) Quarter Ended Quarter Ended Quarter Ended Quarter Ended September 30, 2023 December 31, September 30,2022 December 31, Unaudited ($ in thousands) 2019 2018 North America Loss Adjusting $ 10,468 $ 3,750 International Operations 2,197 (3,922 ) Broadspire 13,532 6,198 Platform Solutions 8,523 10,080 Unallocated corporate and shared costs and credits, net (4,781 ) (2,438 ) Consolidated Operating Earnings 29,939 13,668 (Deduct) Add: Net corporate interest expense (4,556 ) (2,903 ) Stock option expense (145 ) (142 ) Amortization expense (1,986 ) (1,998 ) Non-service pension costs and credits (2,170 ) 532 Goodwill impairment — (36,808 ) Contingent earnout adjustments (2,127 ) (887 ) Income tax (provision) benefit (6,781 ) 13,286 Net loss attributable to noncontrolling interests 145 108 Net Income (Loss) Attributable to Shareholders of Crawford & Company $ 12,319 $ (15,144 ) Q3 2023 FINANCIAL RESULTS
Adjusted EBITDA Reconciliation of Non-GAAP items (cont.) Quarter Ended December 31, Quarter Ended December 31, September 30, 2023 December 31, September 30, 2022 December 31, Unaudited ($ in thousands) 2019 2018 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) Add (Deduct): Depreciation and amortization 9,115 8,924 Stock-based compensation 1,574 808 Net corporate interest expense 4,556 2,903 Non-service pension costs and credits 2,170 (532 ) Goodwill impairment — 36,808 Contingent earnout adjustments 2,127 887 Income tax provision (benefit) 6,781 (13,286 ) Adjusted EBITDA $ 38,642 $ 21,368 Q3 2023 FINANCIAL RESULTS
Net Debt Non-GAAP Financial Information (cont.) September 30, 2023 December 31, Dec 31, 2022 December 31, Unaudited ($ in thousands) 2019 2018 Short-term borrowings $ 16,902 $ 26,990 Current installments of finance leases and other obligations 53 58 Long-term debt and finance leases, less current installments 201,487 211,810 Total debt 218,442 238,858 Less: Cash and cash equivalents 49,208 46,007 Net debt $ 169,234 $ 192,851 Q3 2023 FINANCIAL RESULTS
Segment Gross Profit Non-GAAP Financial Information (cont.) Three months ended Three months ended ($ in thousands) September 30, 2023 December 31, 2019 September 30, 2022 December 31, 2018 North America Loss Adjusting $ 19,737 $ 12,394 International Operations 14,474 9,389 Broadspire 25,500 17,887 Platform Solutions 14,078 15,601 Segment gross profit 73,789 55,271 Segment indirect costs: North America Loss Adjusting (9,269 ) (8,644 ) International Operations (12,277 ) (13,311 ) Broadspire (11,968 ) (11,689 ) Platform Solutions (5,555 ) (5,521 ) Unallocated corporate and shared costs, net (4,781 ) (2,438 ) Consolidated operating earnings 29,939 13,668 Net corporate interest expense (4,556 ) (2,903 ) Stock option expense (145 ) (142 ) Amortization expense (1,986 ) (1,998 ) Non-service pension costs and credits (2,170 ) 532 Goodwill impairment — (36,808 ) Contingent earnout adjustments (2,127 ) (887 ) Income tax (provision) benefit (6,781 ) 13,286 Net loss attributable to noncontrolling interests 145 108 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) Q3 2023 FINANCIAL RESULTS
Reconciliation of Third Quarter Non-GAAP Results Three Months Ended September 30, 2023 Unaudited ($ in thousands) Pretax Earnings Pretax (Loss) Earnings Net Income Attributable to Crawford & Company Net (Loss) Income Attributable to Crawford & Company Diluted Earnings per CRD-A Share Diluted (Loss) Earnings per CRD-A Share Diluted Earnings per CRD-B Share(1) Diluted (Loss) Earnings per CRD-B Share GAAP $ 18,955 $ 12,319 $ 0.25 $ 0.25 Adjustments: Amortization of intangible assets 1,986 1,711 0.03 0.03 Non-service related pension costs 2,170 1,612 0.03 0.03 Contingent earnout adjustments 2,127 2,101 0.04 0.04 Non-GAAP Adjusted $ 25,238 $ 17,743 $ 0.35 $ 0.36 Three Months Ended September 30, 2022 Unaudited ($ in thousands) Pretax (Loss) Earnings Pretax Earnings Net Income (Loss) Attributable to Crawford & Company Net Income Attributable to Crawford & Company Diluted (Loss) Earnings per CRD-A Share Diluted Earnings per CRD-A Share Diluted (Loss) Earnings per CRD-B Share Diluted Earnings per CRD-B Share GAAP $ (28,538 ) $ (15,144 ) $ (0.31 ) $ (0.31 ) Adjustments: Amortization of intangible assets 1,998 1,499 0.03 0.03 Goodwill impairment 36,808 20,908 0.43 0.43 Non-service related pension credits (532 ) (412 ) (0.01 ) (0.01 ) Contingent earnout adjustments 887 657 0.01 0.01 Non-GAAP Adjusted $ 10,623 $ 7,508 $ 0.15 $ 0.15 Q3 2023 FINANCIAL RESULTS
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us-gaap_StatementClassOfStockAxis=us-gaap_CommonClassBMember |
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na |
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Crawford (NYSE:CRD.B)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Crawford (NYSE:CRD.B)
Gráfica de Acción Histórica
De May 2023 a May 2024
